Buying energy and managing the CRC

The event on July 21^st turned out very informative and exceptionally lively. Was this down to the opportunity to free ourselves from the stress of CRC data collection for just one day?

In the morning LASER and Government Procurement Service took us through the energy market, supply and demand, how the market works, factors affecting commodity prices and what is available (or not) to buy.

We reviewed the different risk options/buying strategies available, their similarities and differences, the pros and cons of each, and had a general discussion on what the most appropriate risk options for different parts of the portfolio might be.

During this session we also looked at corporate risk. During a straw poll only one third of authorities present had back to back contract agreements with their schools, a potential liability if the schools wanted to terminate during the contract period. Importantly, less than a quarter of authorities were planning to conduct a leaseholder consultation exercise, with the other three quarters not knowing their risk exposure, which one authority informed us was £1.25 million per annum if they got it wrong!

We revisited the procurement regulations covering the use of Central Purchasing Body (CPB) energy frameworks, governance of those arrangements, what information CPBs can make available and importantly how aggregation provides additional benefits, which can be measured demonstrating value for money rather than savings. Some new value for money metrics were made available, which were not dependent on the market around bid and offer, load shaping and supplier cost to serve/margin. These benefits together would help a typical council avoid costs of approx £200k per year.

Presentation: Bernard Gore (LASER): How energy is bought Opens in a new window

Presentation: Claire Manning and Scott Buckleton: (Government Procurement Service): Risk options, CPBs, Measuring Value for Money Opens in a new window

After lunch, Paul Hamblyn gave a presentation on Government proposals for changes to the CRC. Green Energy Partners, who have carried out the LEP’s verification service, then presented their findings on CRC preparations to date. Most councils were at amber status with data management, supplier statements and accessing appropriate guidance from the Environment Agency as key issues.

In a time of pressured resources we asked how much staff time had been set aside for CRC management. The overwhelming response was in excess of 100 man days, with many saying "and the rest, try the last couple of years!"

We finished up with a Q&A session on CRC preparations, clarified a few confusing issues and closed for the day.

Presentation: Paul Hamblyn (EuroSite Power): CRC Update Opens in a new window

Presentation: Emma Hutchinson (Green Energy Partners): CRC Verification Service findings Opens in a new window

Presentation: Amanda de Swarte (London Energy Project): Introductions and Summary Opens in a new window